By Sam Wood
The Philadelphia Inquirer
WWR Article Summary (tl;dr) When the Governor of Pa. signed a medical marijuana bill into law on April 17, the state became the 24th to legalize medical cannabis. The question for many now, including many women in business is what this means in terms of entrepreneurial opportunities. This weekend, 450 entrepreneurs and venture capitalists gathered for what was billed as the “Innovation in the Cannabis Industry” conference to start taking a serious look.
The Philadelphia Inquirer
When the 1849 Gold Rush hit, it wasn’t the miners who got rich. The businessmen who sold blue jeans and pickaxes amassed the real fortunes.
When Gov. Wolf signed a medical marijuana bill into law on April 17, Pennsylvania became the 24th state to legalize medical cannabis.
In Old City on Saturday, about 450 entrepreneurs and venture capitalists gathered at the Chemical Heritage Foundation for what was billed as the “Innovation in the Cannabis Industry” conference.
There were heady predictions — euphoric estimates of how large the marijuana industry could grow and the many opportunities for profits it might bring.
“This eclipses the birth of the internet,” said panelist Leslie Bocskor, an investment banker. “This is the greatest entrepreneurial opportunity we’ve seen in generations.”
Bocskor predicted that by 2020, marijuana and its cousin, industrial hemp, would fuel a $45 billion U.S. industry.
“It will be five times the size of all the major sports leagues in the U.S.,” he said in an interview before the conference. “It will be nothing short of massive.”
Coupled with Bocskor’s forecast was an abiding faith that the federal government, which currently considers any marijuana 100 percent illegal, will decriminalize cannabis within the next five years.
Other presenters cautioned against irrational exuberance.
“There’s a lot of pie-in-the-sky,” said panelist and attorney Marc Ross, who advises cannabis-related start-ups. “Enthusiasm is good, but it’s not always realistic.”
During the next two years, Pennsylvania will begin to accept license applications for 25 growing operations and 150 medical marijuana dispensaries.
Licenses won’t come cheap. After paying a nonrefundable application fee of $10,000, a would-be pot farmer will have to show $2 million in liquid assets, with $500,000 on deposit, to be considered a contender.
On top of that, the cost to build and outfit a growing operation will average about $3 million, according to industry analysts.
That did not seem to deter some who attended Saturday’s conference. Nick Blank and Pedro Sotomayor, who operate a chain of pawn shops based in Reading, said they have begun looking at warehouses large enough to contain a growing operation.
Sotomayor, a burly man with a shaved head and heavy-rimmed glasses, said he expected competition to be stiff because, unlike New Jersey and New York, the Pennsylvania law doesn’t require operators to be a state resident.
Some potential investors took a more hardened view. Jeff Pyros, whose Pyros Financial Group in Wilkes-Barre advises and invests in tech start-ups, said there’s little chance that the politically unconnected will win one of the coveted permits to grow or distribute.
“Who’s going to get the licenses?” asked Pyros. “Follow the money. It won’t be the typical Joe.”
But others see opportunity on the periphery. Greenhouses will need HVAC systems to maintain constant temperatures and humidity, security details to patrol cannabis operations, and organic chemists to ensure quality and potency, panelists said.
Dozie Mbonu, a former professional international basketball player and roundball standout at Lehigh University, is looking for investors. Mbonu said his 75-year-old aunt, a former biotech researcher, had invented a “fungal inoculant,” a soil additive that would increase yields of “almost anything that grows.”
Megan Krache was drawn to the conference looking for opportunities to invest in cannabis-related start-ups.
Krache, the director of commercial real estate lending for Blue Bell-based Drexel Brothers L.L.C., said banks and hedge funds won’t lend to marijuana businesses for fear the federal government could seize the assets at anytime.
“They are legitimate business owners and they’ll need loans,” said Krache. “We’re not a bank. And this is a good time to get involved.”
Lauren Jenison was thinking smaller. The owner of Sweetflag, an online business that sells accessories for smoking tobacco,
Jennison said she attended to get a realistic gauge of the market and listen for new ideas.
“It is like a gold rush,” she said of the emerging cannabis industry. “And I want to be the person selling pickaxes.”
